| Author | Message | ||
     Michael Jastrzebski New member Username: Michal Post Number: 10 Registered: 03-2004 |
How is it with paying taxes on an aircraft like Express ? The calculator shows a rough average of $255,000 for a typical final product but how much taxes I would have to pay on top of it ?. Am I correct that labor is not taxed only the parts ? Maybe this is where lies slight advantage over say buying a brand new Cirrus SR22 and paying taxes on the whole $400,000 ? | ||
| wayne Unregistered guest |
taxes are dependant on your state,I had to pay 5% to the state for the price of the plane, not what it is "worth" NOT paying taxes on the plane is what I would call a SMALL reason for building, there are many advantages and savings by doing it yourself. | ||
| Michael Jastrzebski New member Username: Michal Post Number: 11 Registered: 03-2004 |
I had to pay 5% to the state for the price of the plane, not what it is "worth" ok, wayne, how do you or your state arrived at the "price " ?? also are you telling me that before you paid this 5% you did not have to pay Washington (or whatever state) sales tax for the engine, actual kit, avionics, etc. ? | ||
| Anonymous |
Hi Michael, While every state has there own laws most are similar. If you live in the State of Washington, Express should charge you sales tax or Express will be liable for that sales tax. I do not know if Washington has tax on labor, my state does not, therefore any charge for labor would not be taxable to me. I am building at home so I still do not know Washington's laws, but when I have my plane painted and avionics installed you can be sure I will negotiate hard on the cost of parts and be more lenient on labor. If you live outside of Washington and take delivery outside of Washington you do not have to pay Washington sales tax, but when you register the plane you will have to pay sales tax to your State (if they have a sales tax) on the cost of what you paid for the taxable items (parts in my state) of the plane. What you claim as the parts is up to you. In most states any time you buy anything outside the state, YOU are liable for sales tax for that, the difficulty is in enforcing it. Several years ago, my company routinely bought supplies and equipment outside of the state and had it shipped to us, and the out of state vendor, who had no license in my state to collect the taxes did not charge sales tax. Of course it was a cost of business so we included it as deductions on our tax return. During one of those fun audits by our state (looking just for this) we were assessed the sales tax on these items plus penalty and interest. Have fun document well. | ||
| Douglas Hoff New member Username: Dhoff Post Number: 16 Registered: 05-2003 |
Michael- If your state taxes are lower than WA taxes that's the way to go. But in order to do this Express will have to deliver the plane to your state. anyway that's what I was told when I got mine, and since SD taxes were much less I'd rather pay them than WA taxes, plus support my home state. I haven't heard about not having to pay taxes on labor, but it's sure worth checking out. | ||
| Charles M. Robinson New member Username: F15epilot Post Number: 24 Registered: 02-2004 |
This question came up on another aircraft forum, as well. I've been through this twice now as a buyer and twice with friend's aircraft. It is state dependent, and you need to check with your state. For Texas (my state of residence), there is no sales tax if it's a private sale (private owner to another private owner; 'private' being defined as you don't buy/sell more than 3 vehicles of that type per year). There is also no "Use Tax" in Texas. In Florida, where I live, they don't charge a sales tax if you buy the aircraft out of state. They DO charge you a "Use Tax" if you bring the craft back into the state within 6 months of purchase. Use Tax varies by county, as most tack on between .5% and 1.5% to the 6% the state gets. Other states have sales, use (by county) AND personal property (California definitely; man others). A couple options you have are: 1) Check Flying Magazine and others for a Delaware corporation company. They form a company and register your aircraft in Delaware. Your FAA registration shows a Delaware address and they forward your mail to you. Your home address remains confidential. Before you throw stones at this, consider that ALL major airlines register their planes this way--run an N-number check on the tail number of the next airliner you're on. 2) See if your state has a previously owned vehicle period (like Florida), and leave the plane out of state that long. 3) List the sales price on the FAA BILL OF SALE as "$1 + OVC"; OVC = other valuable consideration. BTW -- when I filed for and later received my N-number from the FAA, 10 days later I got a letter from Bo Parkins, Florida Department of Tax... The letter had a form where you fill in the purchase price, subtract out the trade-in value, make a couple adjustments for taxes paid to other states (if applicable), and arrive at the taxable amount. You are then requested to send the State that amount and the county their cut. I told him the plane was in Georgia and wouldn't be back into Florida for 6 months (need to finish it; get it flying, and have it painted). He said, "Just send me a note to that effect and I'll close the file." Maybe Florida is just that friendly; your state might not. Check your State's web sites for "Aircraft Taxes" and "Use Taxes" and you should get the contact information, at least. Just be aware that most counties require an N-number before they assign a hangar or parking spot. They'll run that N-number to see when the plane was bought and see if taxes are 'collectable.' Again, California leads the pack in aggressively pursuing tax revenue. Other states are in the hunt to take that title. Good luck Chuck |